McKinsey: technology is helping to transform insurance
Insurance and technology have been connected for quite some time, primarily with the latter facilitating the operations of the former.
However, in its article ‘’, McKinsey notes that this purely functional dynamic (underwriting, claims, marketing, etc) is changing as insurers look to compete with more technologically advanced insurtech enterprises:
“Our experience with insurers that want to leap into the digital era shows that as technologies evolve, these companies may end up automating 50% to 60% of traditional back-office operations,” says the article.
Preparing for a new way of working
An increased level of automation will mean, in turn, a significant cultural reassessment for workforces; teams and individuals may become less siloed in roles and instead be trained for cross-functional purposes, thereby creating much more dynamic employees.
In addition to reskilling existing members of staff, insurance companies will also need to hire tech specialists, data scientists and people with other computer literate skillsets.
Although this will engender a great deal of change within insurance-based operations, McKinsey opines that missing out on the optimised operational efficiencies that result could be deleterious for insurers looking to retain their share of the modern market.
The first step of this digital transformation journey should be the decluttering of complex IT systems in favour of SaaS options, which can be used for daily functions such as HR admin, distribution and commission processing.
Once this has been effected, more advanced technology with specialised functions such as RPA, advanced analytics and deep learning algorithms can be employed. These can be further supplemented by IoT networks which stream and integrate vast streams of data to a central, analysable point.
“These technologies are helping digital-first companies shrink their expense ratios to almost 40% lower than those of traditional property and casualty insurers. Advances in artificial intelligence are also allowing incumbents to automate increasingly complicated tasks, including addressing all forms of customer queries.”
Focusing on the customer and collaboration
Most importantly, McKinsey advocates that whatever tech advances are introduced by an insurer must serve the customer’s interests and promote the company’s image as a provider of quick, reliable and intuitive services tailored to specific needs.
“For example, one American insurer offers a 24/7 chatbot service to help customers complete straightforward transactions, such as updating designated beneficiaries,” adds McKinsey.
A spirit of collaboration with the wider community is also highly important; remaining at the cutting-edge of service requires communication with entities which are pioneering new methods and industry perspectives. Failing to do so could quickly result in atavistic operational standards.
“Many insurers are overcoming this challenge and setting up new service models quickly by partnering with insurtechs, technology companies, and even traditional business-process outsourcing companies,” the article continues.
“These new service models significantly reduce operational expenses while often also providing additional revenue streams in the form of recurring insurance-as-a-service (IaaS) offerings.”
It is, perhaps, a foregone conclusion that the digital era will fundamentally change insurance operations. Although a new ‘standard’ has yet to emerge, taking stock of how the transformation will alter every aspect of a company - from staff to strategy - will stand insurers in good stead to making the transition successfully.
SLK Software: Optimising performance in the digital economy
Established in 2000 in Bengaluru, India, SLK Software recognises that fast-paced digital transformation is creating an unprecedentedly fertile period of opportunity for global businesses.
As such, with a firm belief in the power of simplification and automation to yield new and exciting experiences, the company has been challenging the status quo for over 20 years through an approach that is:
- Relationship oriented
- Strategically focused on a desired outcome
- Reliant on automation tech
Believing in purposeful automation
SLK’s specialisation in automation tech is full spectrum: artificial intelligence (AI) and machine learning (ML), Computer Vision, Natural Language Processing (NLP), Robotic Process Automation (RPA), and more, are all part of its core competencies.
Citing 90% productivity improvements, 30% business growth through better customer experiences, and up to 20x faster go-to-market capabilities, the reasons for its focus are clear.
The company currently serves the banking, financial services, insurance, retirement services, M&A, manufacturing, and supply chain sectors. Solutions offered include:
- Intelligent Business Transformation
- Agile IT Automation
Accelerating workflow processes
The latter is a tool specifically calibrated to enable business users an easy method for capturing document processes. This can occur across any application, with these individual tasks then seamlessly combined for both improved compliance and governance.
Carol Castelloni, VP of Transformation at CNA Insurance, highlighted this as providing critical support in helping the company meet its business objectives:
“SLK’s Avo Discover tool accelerates how we can document workflow processes, measure impacts on enhancements, and identifies future automation opportunities.” Liberated from having to focus on these process-driven aspects of business, CNA Insurance has been able to refocus its attention on creative problem-solving instead.
Ultimately, this is the most important benefit that SLK brings: it optimises the back end so that clients can channel their energy towards what matters the most, customers.
Read more about SLK Software and CNA Insurance in the June 2021 edition of FinTech Magazine.
Pictured: SLK Software team (source)